Generally, soft jaws are used with chucks that have 2 piece jaws, one piece that mates with the scroll of the chuck and separate "front" pieces that hold the work. Soft jaws replace these gripping parts of the jaws. Their purpose can be several fold. First they can be machined "true" since all 3 jaw chucks have some inherent runout. Second they can be machined to hold specific parts that may have a shape not easily held by a regular jaw. Once this is done they can be saved in case that same job must be done again later on, or remachined to fit another job. The main point is that they are of a softer material...mild steel or aluminum...and thus can be machined where hardened jaws can not. And finally, being of a softer and generally less expensive material they are to some degree disposable. Thats my 2 cents worth...lol
Bill